Correlation Between Anfield Resources and ALX Resources

Can any of the company-specific risk be diversified away by investing in both Anfield Resources and ALX Resources at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Anfield Resources and ALX Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anfield Resources and ALX Resources Corp, you can compare the effects of market volatilities on Anfield Resources and ALX Resources and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Anfield Resources with a short position of ALX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Resources and ALX Resources.

Diversification Opportunities for Anfield Resources and ALX Resources

0.0

Correlation Coefficient

Anfield Resources  ALX Resources

Pay attention - limited upside

The 3 months correlation between Anfield and ALX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Resources and ALX Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALX Resources Corp and Anfield Resources is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Anfield Resources are associated (or correlated) with ALX Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALX Resources Corp has no effect on the direction of Anfield Resources i.e., Anfield Resources and ALX Resources go up and down completely randomly.

Pair Corralation between Anfield Resources and ALX Resources

If you would invest  6.00  in Anfield Resources on December 28, 2024 and sell it today you would lose (1.00) from holding Anfield Resources or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Anfield Resources  vs.  ALX Resources Corp

Anfield Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Anfield Resources reported solid returns over the last few months and may actually be approaching a breakup point.

ALX Resources Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALX Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, ALX Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Anfield Resources and ALX Resources

The main advantage of trading using opposite Anfield Resources and ALX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anfield Resources position performs unexpectedly, ALX Resources can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ALX Resources will offset losses from the drop in ALX Resources' long position.

The idea behind Anfield Resources and ALX Resources Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.